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Cryptocurrency laws in the United States should be “reserved” and should not regulate the technology as if every use of it is financial, the commissioner of the US Securities and Exchange Commission argues.
On June 29, Commissioner Esther Pierce, who has been dubbed the “Cryptocurrency Mom”, appeared remotely at the Australian Blockchain Week and was asked how she would regulate cryptocurrencies and replied:
“I think we need to make sure that whatever regulatory framework you have in place doesn’t just assume that everything is a financial asset.”
Pierce explained that while cryptocurrency is seen in “very financial terms,” there are other uses for it, such as allowing people to interact without requiring a centralized entity.
“It’s useful in a financial context, but it’s also useful when building a social media platform or whatever,” she said.
Protecting investors is important, but the government needs to have a good reason to prevent people from investing their own money as they choose: https://t.co/QgPm38iSrp
— Hester Peirce (@HesterPeirce) June 27, 2023
Pierce believes that any legal framework should take a “low-key approach” but include “enough clarity that people feel like they can try something.”
“There is something to be said for not creating a structure that is so inflexible that it doesn’t accommodate new ways of using cryptocurrency and blockchain.”
In a clear blow to the SEC’s current approach, which has been criticized by many, including Pierce, the commissioner said the laws “can’t be reserved, then all of a sudden [регулирующие органы] come in five years with a bunch of enforcement actions.”
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When asked about her cryptocurrency protection, Pierce said that she thinks the SEC “could do better” and believes that if she can’t speak fluently, “then I don’t know why I’m in this position.”
“Cryptocurrency gives [SEC] an opportunity to rethink our approach to innovation […] I really think we took the wrong approach,” she said.
Citing the collapse of FTX and the allegations of misconduct that followed, Pierce advised the crypto industry to self-regulate and pay attention to counterparty risks, conflicts of interest and leverage.
“These are things that you don’t have to tell the government regulator, but I think government regulators can play a role in that.”